I've also wondered about this case.
As an instructor you are supervising a pilot who is outside the 90 day requirements for the carriage of passengers. You cannot be a passenger, as the pilot isn't allowed to take them, so you must log it as crew time.
The normal interpretation is instructor logs P1, and pilot logs Pu/t.
This won't upset anyone, but, as no instruction or intervention has taken place, wouldn't it be more appropriate for the pilot to log the time as P1S?
I stick to the interpretation that Bose-x describes, but don't necessarily agree with it.